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Are Real Estate Banks More Affected by Real Estate Market Dynamics?

Author

Listed:
  • Lucia Gibilaro

    (University of Bergamo)

  • Gianluca Mattarocci

    (University of Rome 'Tor Vergata')

Abstract

The literature primarily focuses on the effect of changes on property prices in terms of macrovariables and monetary aggregates. Only a few studies have taken into account bank characteristics when considering the effects of real estate market trends on bank lending policies and performance, and there is no study that controls for the type of bank or loan purpose. The paper studies the linkage between property market trends and bank risk exposure. We test for any significant difference of real estate banks with respect to other banks and the different roles of the real estate market trend in explaining changes in bank risk exposure. The empirical evidence demonstrates that real estate banks are not always riskier than other banks, and specialized banks are less sensitive to real estate market trends than other banks.

Suggested Citation

  • Lucia Gibilaro & Gianluca Mattarocci, 2016. "Are Real Estate Banks More Affected by Real Estate Market Dynamics?," International Real Estate Review, Global Social Science Institute, vol. 19(2), pages 151-170.
    • Handle: RePEc:ire:issued:v:19:n:02:2016:p:151-170
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    References listed on IDEAS

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    2. Ádám Banai & Nikolett Vágó, 2018. "The effect of house prices on bank risk: empirical evidence from Hungary," NBP Working Papers 289, Narodowy Bank Polski.

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    More about this item

    Keywords

    Real Estate Banks; Real Estate Market; Bank Risk; Bank Specialization;
    All these keywords.

    JEL classification:

    • L85 - Industrial Organization - - Industry Studies: Services - - - Real Estate Services

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